This article covers the different methods of storing Crypto and the different advantages and disadvantages of each. It also explains the difference between custodial and non-custodial. This is by no means a comprehensive list of all available options, but this can be used as a reference when conducting research for crypto storage options. Please conduct your own due diligence before choosing a crypto wallet. Now, let’s dive in at take a look into the crypto storage ecosystem.
Custodial Exchanges, Banks, Apps, Platforms, and Wallets
Non-Custodial Hot Wallets
Non-Custodial Cold Wallets
What is the difference between Custodial and Non-Custodial?
Custodial means that a centralized entity controls
the private keys that access the crypto.
For instance, Coinbase is a custodian for all crypto within their exchange. When you purchase crypto through Coinbase, you only purchase a claim on that specific amount of crypto on that exchange. The custodial financial responsibility is placed on the exchange or institution.
Non-Custodial means that when you setup a wallet or account, you have full
control of the private keys and thus sole access to the crypto.
The owner alone has access to that specific wallet and the crypto contained within that wallet. The owner of the private keys has a higher level of financial responsibility for that crypto wallet. For instance, if you lose your password, PIN, or seed phrase(s), you lose access to the crypto.
Storing crypto in exchanges and banks is not as secure, lower security, but less personal responsibility.
Various crypto platforms including exchanges and banks have been hacked and crypto has been stolen.
Phrase to remember – “Not your keys, not your crypto.”
For more information about crypto hacks: Crypto Exchange Hacks
There are some benefits to keeping small amounts in crypto exchanges or banks.
Interest bearing crypto savings accounts
Staking for rewards
Providing Liquidity for rewards
Crypto Loans
Day trading
Use caution when storing more than $5,000-10,000 worth of crypto in custodial platforms. Please do you own research and due diligence when investing in crypto exchanges, banks, apps, and other platforms. Please understand the risks involved before investing in crypto.
– Can connect to the internet easily
– Phone apps
– Desktop applications
– Internet Browser extensions
– Medium level of security
Trust Wallet
Free – https://trustwallet.com/
Mobile App
Owned by Binance (One of the largest crypto exchanges in the world)
Can store 160k+ different crypto assets
Including Tokens, NTF’s, ERC20, etc.
MetaMask
Internet Browser Extension and mobile app
Can be used to purchase NFT’s, conduct cryptocurrency swaps on Uniswap, PancakeSwap, providing liquidity, yield farming, DeFi, etc.
Used for many different Ethereum ecosystem transactions
Exodus
Mobile & Desktop App
Compatible with Trezor non-custodial cold wallet
Very secure, offline storage, very difficult to hack via the internet.
Requires a high level of personal financial responsibility.
If you lose your password, PIN, or seed phrase (private key), you lose access to your crypto.
Ledger Nano S (USB)
https://shop.ledger.com/products/ledger-nano-s
Highly rated, highly secure, very popular
USB support
Supports many different crypto assets
Trezor One (USB)
https://shop.trezor.io/product/trezor-one-white
Supports many different crypto assets
24 seed word private key password
Also very secure, highly rated, and reliable
SafePal (Device)
Lowest cost option for cold wallets
Very light, the size of a credit card
LCD screen readout
USB connection not required to check crypto balances
“Not your keys, not your crypto.”
If you do not physically have the private keys to your crypto wallet in your possession, you only have a purchased claim on crypto owned by a custodian.
Use caution when storing more than $5,000-10,000 worth of crypto in exchanges or banks.
Consider keeping large amounts of crypto under your control where only you have the private keys for access. Please do you own research and due diligence when investing in crypto exchanges, banks, apps, and other platforms. Please understand the risks involved before investing in crypto.
Non-custodial hot wallets are more secure than Custodial platforms. They can easily connect to the internet to transact crypto.
Each hot wallet has different features and varying levels of crypto support, please do your own research when considering a purchase or investment.
Non-custodial cold wallets are most secure and the private keys are primarily stored offline unless accessing crypto.
Cold wallets are very secure, protect and safeguard your private keys! If you lose your private keys, you lose your crypto. Paper wallets, which are technically cold wallets, are the most secure method for storing crypto assets. An article detailing paper wallets is forthcoming.
-Konjo
Credits
Icons made by Freepik, Eucalyp, Dighital, itim2101, xnimrodx, surang, mangsaabguru monkik from www.flaticon.com
Trust Wallet – https://trustwallet.com/
MetaMask – https://metamask.io/
Exodus – https://www.exodus.com/
Ledger – https://www.ledger.com/
Trezor – https://trezor.io/
SafePal – https://safepal.io/
Cryptosec.info – https://cryptosec.info/exchange-hacks/
*****Disclaimer*****
The content provided on this website does not constitute investment advice, financial advice, or trading advice. Please conduct your own due diligence and research before making any investments. This article is covers some crypto storage examples. It is not a comprehensive list or specific purchasing advice for any specific wallet, company, or service aforementioned. Please conduct your own research to determine the best storage solutions to meet your specific requirements. Please understand the risks involved before investing in crypto.